Cost Segregation studies allow tax payers to capture accelerated depreciation deductions by reclassifying components of a building into accelerated recovery periods. Most commercial properties are depreciated over 39 or 27.5 years. Cost segregation studies are an approved method from the IRS that requires engineers and CPAs to reclassify portions of commercial properties to shorter depreciation lives, as short as 5 years. These accelerated deductions apply to both federal and state income taxes, allowing for significant cash flow increases.

Any commercial property is eligible for a cost segregation study. For every dollar, a cost segregation reclassifies from 39-year property to 5-year property results in an estimated 22 cent benefit. Cost segregation studies can provide a substantial return on investment:

The largest benefit to a cost segregation study is captured by accelerating depreciation deductions and using the increased cash flows in an effective method to capitalize on the time value of money.

An additional advantage that is often not an area of focus is that if a building component subsequently needs replacement, taxpayers can write off its remaining tax basis. Generally, if the taxpayer does not do a cost segregation study, no loss could be taken because the component’s tax basis and the basis of the building would not be separately stated.

Traditionally, many CPA’s do not have the expertise and depth within their professional network to deliver cost segregation studies.

Our team and systematic process takes a comprehensive approach to cost segregation, by leveraging our network of licensed professional civil engineers, cutting edge technology and top-tier knowledge, our team can efficiently do properties of any size without an in-house team of engineers and consultants. If you need commercial tax help in Charlotte, we are the CPA firm to call.

Camuso CPA PLLC offers comprehensive services to develop and tailor a first-rate tax plan for your business needs.  Reach out to our team regarding any questions about cost segregation or establishing a comprehensive tax plan.

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